U.S. financial titan JPMorgan Chase's $2 billion trading loss is an embarrassment for the otherwise tightly-run financial ship but won't inflict lasting damage to the company, says William M. Isaac, former chairman of the Federal Deposit Insurance Corp. (FDIC).

Meanwhile, the bank's leadership should be given room to work out the problem itself and doesn't need the government complicating damage control by excessive probes and interference.

"I think it's very important that we do not overreact to this situation and keep it in perspective. JPMorgan has $200 billion in capital. They earned nearly $19 billion last year alone, so a $2 billion loss is not in any way threatening to the company. It's a big hiccup. It's an embarrassment," Isaac tells Newsmax TV in an exclusive interview.

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"We're going to have instances like this in any business, banking or otherwise, from time to time."

Calls for increased regulation have already hit the newswires.

"The debacle at JPMorgan Chase reaffirms my view that the largest six banks in this country, including JPMorgan Chase, which have assets equivalent to two-thirds of our GDP, must be broken up," Vermont Senator Bernie Sanders says in a statement.

"This is important in order to bring more competition into the financial marketplace and to prevent another ‘too-big-to-fail' bailout."

Michigan Senator Carl Levin issued similar comments. "The enormous loss JPMorgan announced today is just the latest evidence that what banks call 'hedges' are often risky bets that so-called 'too big to fail' banks have no business making," Levin says, according to the New York Times.

"Today’s announcement is a stark reminder of the need for regulators to establish tough, effective standards."

For Isaac, such calls are to be expected, including pleas to implement the Volcker Rule, which would ban banks from trading in capital markets with their own money.

The measure, part of the Dodd-Frank financial reform law, has not yet been implemented.

For now, it's best to let the board of directors deal with the loss and move on.

"I don't have any doubt that they are terribly upset and embarrassed by this situation. They are going to address and control weaknesses and then fix them and without any prodding from the government," Isaac says.

"We ought to let management and the board deal with this situation and not have the government micromanage it."

Turning to oversight, Isaac says he is no fan of Dodd-Frank and other regulations because they cannot prevent flawed trades and other snafus from occurring.

"I think Dodd-Frank is very weak and ineffective reform. It didn't address any of the issues that lead to the recent crisis," Isaac says.

"I really dislike Dodd-Frank and I think that what we ought to do is start over and come up with reform that really does address the issues."

Since the downturn, the Federal Reserve has slashed benchmark interest rates to near zero and has flooded the economy with liquidity to keep long-term borrowing costs low.

That may help the stock market, but it won't bring in people rushing to the bank to deposit their money and live off the interest.

"I don't think the low interest rates are healthy for anyone and they do lead to pressures on banks to try to find some way to make money because it's very hard to do it on interest rate spreads when you have interest rates down where they are and you have loan demand so weak," Isaac says.

"These low interest rates are hurting people who have saved their whole life for retirement and now they can't get any income," Isaac adds.

"I'm really not happy with the monetary policy that we are pursuing right now."